(a) A surety bond may be required for each enrolled location pursuant to the requirements of this section if:
  (1) a provider or type of provider has been identified by federal or state agencies to have a significant history of, or potential for, fraud, waste, or abuse; or
  (2) HHSC, in its sole discretion, has determined that a provider, based on the provider's conduct, including falsifying information or any material misrepresentation, will be subject to this requirement.
(b) If a surety bond is required, a provider must maintain a current surety bond to continue participation in Medicaid or CHIP.
(c) HHSC or its designee will not reimburse a provider for items or services furnished during a period in which the provider does not have a current surety bond, if a surety bond is required.
(d) An entity operated or administered by a federal, state, local, or tribal government agency is exempt from the requirements of subsection (a) of this section if, during the preceding five years, the entity has not had any uncollected overpayments associated with Medicaid or CHIP.
(e) A surety bond required pursuant to this section must:
  (1) include a statement that the surety company issuing the bond:
    (A) is licensed by the Texas Department of Insurance; and
    (B) maintains a valid Certificate of Authority with the United States Department of Treasury in accordance with 31 U.S.C. §§9304 - 9308 and Title 31 of the Code of Federal Regulations parts 223, 224, and 225 as a surety;
  (2) state on the face of the bond the Parties, to include:
    (A) the provider as Principal;
    (B) HHSC as Obligee; and
    (C) the surety company (and its heirs, executors, administrators, successors, and assignees, jointly and severally) as Surety; and
  (3) include an effective date and expiration date for the bond.
(f) The amount of the surety bond must be no less than $50,000.
(g) The surety bond must provide that:
  (1) the Surety is liable for uncollected overpayments determined to have occurred during the term of the bond, regardless of when the overpayments are discovered;
  (2) the Surety remains liable:
    (A) for an additional two years after the date of expiration of the bond for overpayments that occurred during the term of the bond, if the provider fails to furnish a new, updated, or renewed bond that meets the requirements of this section; and
    (B) for an additional two years after the date the provider's participation is terminated for services provided during the bond period, if HHSC or its designee terminates the provider agreement;
  (3) the Surety's liability to HHSC is not affected, diminished, or concluded by:
    (A) any action by the provider or the Surety to terminate, reduce, or limit the scope or term of the bond;
    (B) any action by the provider to:
      (i) cease operation;
      (ii) sell or transfer any assets or ownership interest;
      (iii) file for bankruptcy; or
      (iv) fail to pay the Surety; or
    (C) the provider's failure to exercise available appeal rights under Medicaid or CHIP;
  (4) the Surety's liability may be terminated only if:
    (A) the Surety furnishes HHSC with written notice of its intent to terminate the bond no later than 30 days before the effective date of termination; or
    (B) the provider furnishes HHSC with a new bond that meets the requirements of this section; and
  (5) the Surety guarantees that upon receipt of written request for payment by HHSC or its designee, the Surety will reimburse Medicaid or CHIP the amount in the request up to the stated amount of the bond.

Source Note: The provisions of this §352.15 adopted to be effective December 31, 2012, 37 TexReg 9899